South Africa is set for significant fuel price cuts next week. Petrol is expected to drop by R1 per litre, and diesel will see a reduction of between 90 and 100 cents per litre, depending on the grade.
This adjustment is based on month-end data from the Central Energy Fund, which revealed an over recovery in the prices of petrol and diesel during May.
Fuel prices have surged steadily since the end of pandemic-era lockdowns, increasing by over 50% in the past two years.
In early May, petrol prices rose while diesel prices slightly decreased due to lower demand for diesel. Here are the expected changes for next Wednesday:
Petrol 93: decrease of 100 cents per litre
Petrol 95: decrease of 100 cents per litre
Diesel 0.05% (wholesale): decrease of 101 cents per litre
Diesel 0.005% (wholesale): decrease of 92 cents per litre
The price drop in June is largely attributed to the strengthening of the rand against the dollar throughout May, driven by reduced load-shedding and improved economic prospects for the country.
However, the rand has weakened in recent sessions against the US dollar after several research organisations predicted the African National Congress (ANC) is likely to lose its majority. This is, however, unlikely to change the fuel price outlook in this current cycle.
South Africans went to the polls on Wednesday, and as the results are being tallied, the ruling party is considering the potential need to form a coalition with other parties.
By 8:30 am on Friday, the rand was trading at approximately R18.75 to the dollar.
Over the past month, oil prices have remained relatively stable, dipping slightly due to weak fuel demand in the US and an unexpected increase in gasoline and distillate fuel stockpiles.
Brent crude futures traded at approximately $81.85 a barrel on Friday.
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